Slide 1: Aspire Mining Limited: Fast-tracking the World Class Ovoot Coking Coal Project
ASPIRE MINING LIMITED Fast-tracking the World Class Ovoot Coking Coal Project Investor Presentation March 2019
Slide 2: Disclaimer: Important Information
DISCLAIMER: IMPORTANT INFORMATION NATURE OF THIS DOCUMENT results, performance or achievements of the Company to be materially different from any anticipated future results, performance or achievements expressed or implied by such forward-looking information. Such factors include, among others, This
Slide 3: Investment Case Summary
INVESTMENT CASE SUMMARY 1 255Mt total Reserve flagship premium “fat” coking coal project (Ovoot) in Northern Mongolia 2 Pre-tax NPV10 of US$586m based on a 9.2 year truck/rail solution using just 15% of total Reserves; extended 12.5 year case improves pre-tax NPV10 to US$758m 2nd quartile producer o
Slide 4: Asset Overview and Locations
ASSET OVERVIEW AND LOCATIONS Key Information Asset Locations FLAGSHIP PROJECT Ownership: ▪ Aspire (100%) Commodity: ▪ Premium “Fat” Coking Coal Mine Type: ▪ Open Pit & Underground JORC Reserves & ▪ Reserves: 255Mt Ovoot Resources1: ▪ Resources: 281Mt ▪ 51.4km2 tenement position Tenement Area: ▪ 1 Mi
Slide 5: Company Snapshot
COMPANY SNAPSHOT Director Position Capital Structure Units Undiluted Fully Diluted David Paull Executive Chairman Share Price (14-Mar-19) #M 0.024 0.024 Gan-Ochir Zunduisuren Executive Director Shares on Issue1 AUD/sh 3,326.5 4,195.0 Bat-Amgalan Boldbaatar Executive Director Market Capitalisation AU
Slide 6: Leading Strategic Partners
LEADING STRATEGIC PARTNERS Partnerships highlight Ovoot’s strategic value and its status as a Priority One Belt One Road project Successful Mongolian businessman with a track record of building large scale Mongolian businesses Owner of / built the largest internet service provider in Mongolia, e
Slide 7: Ovoot Project Overview
OVOOT PROJECT OVERVIEW Globally significant premium coking coal project located in Northern Mongolia Ovoot Project Highlights Second largest coking coal JORC Reserve, third largest including the non-JORC compliant, Ownership 100% Aspire Mining Limited Government owned Tavan Tolgoi Mine Location Kh
Slide 8: Feb 2019 OEDP PFS Highlights
FEB 2019 OEDP PFS HIGHLIGHTS Aspire is set to be transformed into a significant long term coking coal producer OEDP involves mining a relatively low ash, low strip ratio and high yielding “fat” coking coal from a starter pit that sits within the existing 255Mt Reserve (Ovoot Project Reserve)1 Abou
Slide 9: Feb 2019 OEDP PFS Highlights (cont.)
FEB 2019 OEDP PFS HIGHLIGHTS (CONT.) Highly attractive financial outcomes confirmed based on an initial 9.2 to 12.5 year coking coal operation producing 4.0Mtpa saleable coal OEDP Base & Extended Case Outputs Key Assumptions Physicals Units Base Case Extended Case Assumption Units OEDP Waste Mined M
Slide 10: Ovoot Project Outline
OVOOT PROJECT OUTLINE 100% ownership of a major coking coal basin Now fast tracking into production via the Ovoot Early Development Plan (OEDP) Aspire Mining Ltd Investor Presentation Page 10
Slide 11: Ovoot Road and Rail Path to Markets
OVOOT ROAD AND RAIL PATH TO MARKETS Construction of a 560km surface stabilised haul road enables Aspire to expedite production at Ovoot 12 month option to acquire a 10 hectare rail siding adjacent to the Erdenet Rail Station. Siding can be developed into a stockpile area that could support a subst
Slide 12: Pre-Tax Cash Flows
PRE-TAX CASH FLOWS OEDP to average US$185m p.a. in pre-tax cash flows1 with LOM totals for the Base and Extended Cases at US$1.3b and US$1.9b respectively Projected Annual and Cumulative Pre-tax Cash Flows1 (Extended Case) 300 2,000 Pre-tax FCF 241 Cumulative Pre-tax FCF 1,500 190 188 191 193 191 20
Slide 13: Sensitivity Analysis
SENSITIVITY ANALYSIS Outstanding Base Case economics with unleveraged NPV10 (pre-tax) of US$586m with an IRR of 43.7% OEDP Pre-Tax NPV Sensitivities (USD M) OEDP Base Case OEDP Extended Case 1,200 1,200 1,000 1,000 US $758 M 800 800 Pre-tax NPV Pre-tax NPV US $586 M 600 600 400 400 200 200 - - -10.0
Slide 14: Future Low Cost Coking Coal Producer
FUTURE LOW COST COKING COAL PRODUCER OEDP Base Case will position Aspire as a significant 4.0Mtpa coking coal producer in the 2nd quartile of the global cost curve 2025 Metallurgical Coal Cost Curve (Mt, USD/t) Q1 Q2 Q3 Q4 $200 RoW Australia $180 Ovoot $160 Current Price Assumed Price: US$150/t $140
Slide 15: 2nd Largest JORC Reserve in Mongolia
2nd LARGEST JORC RESERVE IN MONGOLIA Ovoot already has JORC Reserves of 255Mt, the 2nd largest Mongolian JORC Reserve, and 3rd largest Reserve including the non JORC compliant Tavan Tolgoi JORC Reserves of Mongolian Coking Coal Projects1 (Mt, 100% Basis) 350 320 Probable Proven 300 Total Reserves 25
Slide 16: Low Capital Intensity
LOW CAPITAL INTENSITY OEDP has favourably low capital intensity relative to comparable coking coal projects globally, with significant production expansion potential Capital Intensities of Recent Coking Coal Development Studies1 (USD/t p.a.) 250 33 35 Capital Intensity 28 28 30 Mine Life 26 200 24 C
Slide 17: Indicative Timeline
INDICATIVE TIMELINE Aspire expects to be in OEDP production by Q2 2021 with a 15 months haul road construction period commencing in late 2019 / early 2020 Indicative Timeline Through Production Milestone 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 Development Studies P
Slide 18: No Mongolian Discount if Location and Quality Comparable
NO MONGOLIAN DISCOUNT IF LOCATION AND QUALITY COMPARABLE Prices for coking coal and “fat” coking coal are particularly strong with no Mongolian discount observable Coking Coal Prices (RMB/t, incl. 17% VAT) Chinese Border Locations 2500 Erenhot (Erlian) 2000 1500 1000 Case Study: Mongolia Mining Corp
Slide 19: Price Transparency
PRICE TRANSPARENCY Seaborne coking coal pricing for Chinese buyers is generally calculated on a USD/t FOB basis with a current Tianjin Spot price of US$209/t1 Tianjin Mongolia Coking Coal Prices (USD, ex VAT)1 Coking Coal Pricing (Incl. Delivery to Tianjin)1 (USD/t) 250 Ovoot Coking Coal Low Est. Hi
Slide 20: Investment Highlights
INVESTMENT HIGHLIGHTS Uniquely strategic Ovoot Coking Coal Project positioned to unlock the Northern Mongolia mining 1 province 2 One of Mongolia’s largest coking coal JORC Reserves comprising 100% Chinese (FM) “Premium Fat Coal” Highly experienced Board of Directors supported by key Mongolian share
Slide 21: Contact Details
CONTACT DETAILS ASPIRE MINING LIMITED ABN: 46 122 417 243 ASX Code: AKM Web: www.aspiremininglimited.com Offices: AUSTRALIA MONGOLIA Level 9, 182 St Georges Tce Sukhbaatar District, 1st Khoroo Perth, WA 6000 Chinggis Ave-8 Western Australia Altai Tower, 3rd Floor, Room 302 Tel: +61 8 9287 4555 Ulaan
Slide 22: Proximity to Key Market
PROXIMITY TO KEY MARKET Ovoot is ideally located to serve the North Asian coal markets – the largest consumers globally of coking coal Aspire Mining Ltd Investor Presentation Page 22
Slide 23: Favourable Coal Market Fundamentals
FAVOURABLE COAL MARKET FUNDAMENTALS Supportive macro environment after a five year period of sector-wide downturn / distress underpinned by limited to no reinvestment Key Points Broker Consensus Forecast (Coking Coal) Supply pressure across the coal complex which is now 350 Historicasl Prices unde
Slide 24: Exceptional Coking Coal Quality
EXCEPTIONAL COKING COAL QUALITY 100% Chinese (FM) “Premium Fat Coal” with high fluidity and plastic properties Ovoot Coal Blending to Upgrade Lower Ranking High fluidity levels make Ovoot coal an ideal product for Coals blending and upgrading of thermal, oxidised and lower quality coking coals to
Slide 25: High Growth Mongolia Economy
HIGH GROWTH MONGOLIA ECONOMY Mongolia is heavily dependant on the mining industry contributing c. 20% of GDP and 80-90% of exports Economic Overview (2018) Economic Highlights Economy Units Value Top 10 country in many mined resources worldwide GDP USD B 12.4 Democratic parliamentary system with
Slide 26: Mining in Mongolia
MINING IN MONGOLIA “Private investment supported by Foreign Direct Investment and private sector credit will remain a key driver for growth in the medium term, especially in the mining, manufacturing and transport services” – JP Ngarou, World Bank Senior Economist for Mongolia (Oct 2018). Mongolian